Right now, in the thick of the FIFA World Cup, teams from across the globe are vying for the coveted gold trophy with the World Cup Final match taking place on July 15th. While these world-class soccer players aren’t likely focused on making any (ahem) BIG saves for retirement right now, they should be. According to the Telegraph, the average soccer career lasts only eight years with a standard retirement age of 35.

A More Offensive Game Plan

Considering the average World Cup player right now is in their mid-to-late 20s, according to Statista, these professional athletes need to be kicking in as much savings as they can to set themselves up for a successful financial life and a sustainable retirement. There’s only one Ronaldo, one Messi, one Beckham, so establishing the financial security needed to retire after a less-than-a-decade career can feel too far out of reach for most others.

Off the pitch, the savings a typical 35 year old should’ve netted at this point has received a lot of attention lately. A study published from Fidelity recommended having twice your annual salary saved for retirement by age 35. Considering the weight of student debt and the outsized cost of housing plaguing millennials, this number feels very out of reach for most of the population in or nearing their 30s.

While the amount you save is vital, what isn’t gameplanned enough is how you’re saving. You can argue that you can save all you want, but if you’re simply holding your savings in cash, it won’t be in the position to grow enough to enable you to retire. After you establish the habit of saving, you must maximize your ability to grow your investments.

More Coaching Required

Two big determinants of investment growth are derived from minimizing fees and maximizing returns, and Americans need help with both. Data from the Census Bureau suggests that 79 percent of Americans work for an employer that sponsors a 401k-style retirement plan, but only 27 percent know how much they’re paying in fees on their 401k accounts, according to a study by TD Ameritrade.

Fortunately, by hiring blooom as your trusted advisor, you can rest assured that we’re working on your behalf to reduce investment fees wherever we can. We make managing your 401k simple, smart and affordable by leveraging the right funds for your goals with lower fees to optimize your retirement savings, no matter what age you are. That’s our GOOOOAAAALLLLL.

Valentine’s Day puts a lot of focus on being in a relationship. If you’re reading this blog it probably means that you ARE in a relationship with your 401k, which is great! But just because you’re in a relationship doesn’t mean everything is perfect.

Odds are you fall into one of these six kinds of relationships with your 401k. Let’s put them under the microscope and see what’s going well and what flaws might exist.

The Giver

You are constantly contributing to your 401k. 10%, 15%, or 20%―it doesn’t matter. Anything to keep your 401k by your side all the way to retirement. You don’t care what funds you’re in or whether you get an employer match.

Pros: Contributing is numero uno when it comes to a happy relationship with your 401k, and giving all you’ve got to your 401k can cure a lot of ills.

Cons: The $$$ you put in your 401k should be working for you and not the other way around. Throwing your hard earned cash into a money market account or a high fee investment that doesn’t do anything for you can lead to heartbreak.

Things you might say to your 401k: Oh, you only had a 2% rate of return this year? It’s not your fault. Let me just up my contribution level to make you feel better.

The Taker

You set up your 401k… isn’t that enough? Why do you need to check in on it? It should just be grateful that you contribute a few bucks every paycheck.

Pros: Not looking at your 401k and over thinking it can be a virtue.

Cons: If the foundation of the relationship isn’t there, or if you’re not properly invested, this relationship could be going nowhere.

Things you might say to your 401k: Stop complaining, I could be spending my money elsewhere.

The Controller

One look at you and anyone can tell you care about your 401k. You are very attentive, but somewhere in all that effort you’re putting towards your 401k, you may start to suffocate it with your demands and restrictions.

Government service is often thankless. I saw firsthand bouncing around the country from town-to-town as the son of a life-long USDA employee. But in comparing notes between my Dad’s Thrift Savings Plan (TSP) and what I know of 401ks, the TSP might be one area where the public sector got it right. How so?

If you’re a person with a 401k, we at blooom often start with a simple question. Know what you’re paying in investment fees? Generally, the answer is no. And the cost of what they’re invested in often surprises them. That’s where we come in to help 401k clients. For people in a TSP, the fee discussion is a little different – on the surface.

And that has more to do with predatory Wall Street practices than the plans themselves.

Investment selection, rebalancing and fiduciary services could help federal employees achieve a better retirement. So, let’s explore why current and former federal employees should consider those services before cutting that last bit of government red tape known as the TSP.

Thrift Savings Plans (TSP) Have Few Investment Fees

A TSP is a lot like a 401k, but the investment expenses are generally better in the former. Say 20 times better. Compare the average expense ratio of 0.03% for a TSP to the median 401k expense ratio of 0.60% we see pre-blooom rebalance.

Millions of federal workers are in the plans. A 2014 CNN Money article surmised why many millions more are bypassing these low-fee plans (or opting out when they leave their federal job) and perhaps paying thousands more in fees in other retirement savings vehicles.

The saying “ignorance is bliss” doesn’t apply to hidden 401k fees. We frequently reference them … and for good reason. According to research from NerdWallet, people with 40 years until retirement could lose as much as $500,000 because of investment fees.

We’re going to provide a simple break down of the fees found in your 401k. We’ll also review what, if anything, you can do about them.

Providers Have Three Main Types of 401k Fees

Investment fees are specific to each investment option your plan offers and typically the loftiest type of fee. Luckily, you can usually control – or get help to control – these types of fees. They can be reduced by simply choosing to invest in funds that have lower expense ratios.

Other types of 401k fees, administrative and service fees, are more difficult for you to reduce, as they are an innate part of your provider’s plan.

Here’s the quick overview of the three main types of fees:

Investment fees – Expressed as an “expense ratio” of anywhere from 0.01% – 3%. Our team will call these “fund specific fees” or “fund fees.”They cover the management of the investments within your plan. And they typically represent the largest component of fees. Generally assessed as a percentage of assets invested, they are deducted directly from your investment returns: Investment fees are taken out annually as a percentage of your investment.

Sales charges – transaction costs for buying/selling shares

Management fees – for managing the assets of the fund, often used to cover administrative expenses

Other fees – to address services such as furnishing statements

Plan administration fees – The fees charged to keep your plan running. These fees include recordkeeping, accounting, legal and trustee services that are necessary for administering the plan.

Individual service fees – typically associated with optional features offered under a 401k plan. Some additional services may include access to a customer service representative, educational videos or seminars, planning software, investment advice, or online transactions. The more services provided, the higher the fees. The cost typically corresponds with the size of your employer’s 401k plan, i.e. there are benefits of scale (the following are the typical fees by employer size):

1.4% for small employers

0.85% for medium-size employers

0.5% for larger employers

Investment Fees Pile On – They’re Vermin You Want to Control

We sometimes hear from people that they don’t need to worry about investment fees because their account balance is relatively small. But here’s the rub: Fees negatively affect your 401k (or other employer-sponsored retirement plan) in several ways.

Seven or more hours of sleep per night? That’s what the National Sleep Foundation recommends for adults. A half an hour of exercise each day? Those are numbers from the Department of Health and Human Services. One hour to eat per day – says who? The USDA, that’s who. With so many things to do in life, we decided to crunch all the numbers of what the experts “recommend” you do in a 24-hour period — and the total adds up to 30 hours in this nifty time infographic!

Well, that’s life for you: 30 hours of steps to perform in 24 hours of moves. See how we can free up a move for you!

Meet Our Fictitious Player Kari: She Can Relate to the Time Infographic

Kari’s a 37-year-old single mom with two kids: Jasper, who’s 8, and is always playing baseball; and Cassie, a 4-year-old who enjoys finger painting butterflies.

Kari works full-time at a local department store, and loves picking up her kids from school after work. Once they’re all home, Kari feeds the kiddos, helps them with their homework, puts them to bed, and finally makes sure everything is all set for the next day. After that, she decides to spend some time before bed researching 401ks and financial planning. But 10 minutes into her research, she falls asleep. Her 24 hours are up, but the time infographic says she has six more things to do.

Sound familiar?

A Managed Account Can Help You Lifehack a Move

At this point, you’re thinking the same thing as Kari: How in the world can I get all this done? Life is a tough game. We all have hectic schedules and can relate.

We’re not positive whether you can lifehack your way to all 30 moves. But we do know one thing — a managed 401k account is one lifehack you can play to get closer.